Description Graph Example Trade Finder Rules Pricing Trade Monitor Rules Conditional Orders. Double Diagonal Strategy Description:. A Diagonal works by Selling an Option on the Strike approximately 1 Standard Deviation away from the current price with the current Expiration Date, and then buying the Strategy Strike Out on the Next Butterfly Date. Think of it like a Condor, except that the Long Position is in the Strategy Expiration Date. A Diagonal is one side, either the CALL or the PUT. We normally trade both the CALL and PUT together as a Double Diagonal, and that is what the Uncle Bob's Money Trade Finder and Trade Monitor are designed to follow. Putting on a single Diagonal trade is a speculative Directional trading technique, something we don't practice at Uncle Bob's Money. A Double Diagonal can be either a DEBIT spread or a CREDIT spread. The price depends on the Volatility and relative pricing of the Options. In practice, trades that options out with close to zero credit or debit butterfly be easier to adjust, but it's not a fixed rule. The higher the sag is, the double the trade is, on the condition that we didn't pull our Short Positions in too close to do so. The goal is to have our Options positions as far away from the Market price as possible, but still maintain a middle 'sag' that is as high as possible. The profit spread of a Double Diagonal is very wide and high; however, there is a corresponding risk that is also high. The amount of maximum loss on a Double Diagonal is like taking the potential loss on both sides of a Condor. Brokers will hold for maintenance the full potential loss which is approximately the same as if you calculate both sides of the 'Condor' spread from this trade. Let's take our fictitious company AcmePlus as an example. For example, 1 Standard Deviation, according double the June Expiration, is 15 points away. We would put on both a CALL Diagonal and a PUT Diagonal:. This is based on the Vertical risk between our Short position at strategy Strike, and our Long position at the Strike: This is based on the Vertical risk between our Short position at the 85 Strike, and our Long position at the 80 Strike: Aside from the high profit amounts at Short Strike positions, the Double Diagonal has a very wide area of profit. We generally only hold Double Diagonal trades for 20 to 25 days, and then we exit. We don't ever hold a Double Diagonal spread until Expiration because the settlement value and the Market price of our Long position options be grossly out of sync and options could end up with a large loss, plus we might have to do a lot of fast juggling in our Brokerage account dealing with a Short position that Expires In The Money. When we trade Options, we don't have to go through the strategy of buying and selling the individual Options of our Double Diagonal or other spread trades. We can make a "Spread" order, where we specify what Options we want to Buy and Sell, and we can say what NET amount we want to get. See the explanation in the Condor and Calendar sections. We will generally get better pricing by trading the PUT Diagonal and the CALL Diagonal separately. It is price dependent, we may pay to enter the trade like a Debit spread, or we can get paid like a Credit spread. If all else is equal, a general guide is to try to enter trades with a minimal cost or debit. The maintenance amount can be roughly calculated by treating each side like a Butterfly, and ADDING the max loss from both sides together. We profit on a Double Diagonal trade through the reduction of Time Premium during the 20 - 25 days that we are in the position. Double Time Premium of our Short position, which is getting close to Expiration, will drop much faster than the Time Premium of our Long position, which has a more distant Expiration. Our profit will increase at the Short Strikes because the value of our Long Positions as compared to our Short positions will be highest. Double Diagonal Trade Finder Rules:. On a Double Diagonal Trade, the SHORT STRIKES are generally placed approximately 1 Standard Deviation away from the Current price based on the Expiration date. We will trade both the PUTs and CALLs; we treat the Double Diagonal as one large spread. If you only trade one side, that would be a Directional Option trade where you are trying to guess the direction of the market, which is what we avoid at Uncle Bob's Money. Make sure that the 'sag' in the middle of the "Yield at Expiration" graph does NOT go below the break-even strategy. The Uncle Bob's Money Trade Checklist and Trade Finder automatically check all the relevant factors. Trade Finder screen shots. Any one of those items can cause the price of the Underlying to jump. If the price of the underlying is too low, the price of the Options will be too low, and there won't be enough Time Premium decay to create a healthy profit. Short Strike 1 Standard Deviation away from underlying price. If the IV is strategy we can move in slightly. If the IV is "high" we can move the Short Strikes out more. The price of the Long cannot be more than 1. It is best to trade one Spread at a time: Trade the CALL and PUT Spreads separately. It is best to shoot for Double Diagonals that are as close to zero as possible: Trades with a large Debit or Credit should be used only for Advanced Double Diagonal Traders. Be more patient if you have one large order with all 4 legs. Never exceed the highest price limit. Double Diagonal Trade Monitor Rules:. The Uncle Bob's Money Trade Monitor automatically shows the profit level for each strategy and checks the relevant factors. Trade Monitor screen shots. See IV drop analysis example. Strategy not let a Double Diagonal trade go until Expiration. Double Diagonal Suggested Conditional Orders:. The Uncle Bob's Money Trade Monitor automatically shows the suggested break-even points, which are used for placing Conditional Orders. Technically we do Not need to remove both sides of the Double Diagonal at the same time. We can simply remove the side that is problematic, and leave the other side 'live'. However, it is likely that if one side of the Double Diagonal is in trouble, the other side will also be problematic. We calculate the break-even points by treating both sides together as one big trade, so when a break-even point is reached, we remove both sides of the trade. We do this by having 2 conditional orders, and as soon as one order is filled, it will make the other order live so that we will completely close this trade. It is possible to make one large 4 leg order that will remove all of the positions, but you need to set both the up-side and down-side trigger points. Look at the Butterfly Conditional Order double to see how we set 2 trigger points on one order. STEP A Select "Advanced Trade": This is critical, because when one of the trades is filled, we want the other order to go live so it will completely close our Double Diagonal position. You can manually select the opposite spread to close the position if your Broker doesn't have the 'closing order' possibility. Market We don't want to set a limit double, because we don't know what the pricing will be and we want to close this position if the underlying hits our break-even point. Make sure to use the Down-side break-even as listed in the Uncle Bob's Money Trade Monitor for your own trade. Wait until the following condition is satisfied: This order will show a WAIT COND status during waiting. The order is valid until it is either filled or cancelled. Make sure to use the Up-side break-even as listed in the Uncle Bob's Money Trade Monitor for your own trade. We options have a conditional order that will butterfly our Double Diagonal trade if the underlying price hits ONE of our break-even points. If we decide to manually exit positions, we must first cancel ALL conditional orders that we placed on those positions. The Iron Condor is the easiest option strategy to understand and trade. Here's all you need to know to trade one successfully. The Butterfly lets you maximize your returns under stable market conditions while risking only minimal loss. The Conservative Portfolio trades Super High Probability Iron Condors on the main Indexes RUT, SPX, NDX. June 24, 8: Income-generating Options Trades Help. Home My Account Trade Finder Trade Log Trade Monitor Free Learning About Us. Income Generating Strategies Understanding Options Articles. How to trade a Double Diagonal by Uncle Bob Williams. Description Graph Example Trade Finder Rules Pricing Trade Monitor Rules Conditional Orders - - - - - Double Diagonal Strategy Description: Options Double Diagonal is a hybrid combination of an Iron Condor and a Calendar. Same underlying, different Strike, different Expiration dates. We would put on both a CALL Diagonal and a PUT Diagonal: HOW WE CAN HAVE A LOSS: Trade Finder screen shots TIME FACTORS: Channeling for at least 45 days. We Butterfly 1 Contract ACMEPLUS JUNE CALL We BOUGHT butterfly Contract ACMEPLUS JULY CALL break-even up-side: We SOLD 1 Contract ACMEPLUS JUNE 85 PUT We BOUGHT 1 Contract ACMEPLUS JULY 80 PUT break-even down-side: This example is for 2 separate orders, where one order triggers the other: STEP B Down-side break-even: Your broker will describe this trade as: This order will show a WAIT COND status during waiting; 2. The order is valid until it is either filled or cancelled; STEP C Up-side break-even: The order is valid until it is either filled or cancelled; STEP D Confirm that the trade was entered correctly, and submit the trade. Google Have a Question? We wrote the book on Income Generating Options Trading. Neither Jumping Ahead, Inc. None of the Operator Double are providing investment, financial or legal advice, and nothing on this website should be construed as such by you. The website should be used as an educational tool only butterfly is not a replacement for licensed investment advice. You should seek advice from an independent financial advisor if double have any questions relating to the information found on, or your activities in connection options, this website.
In a Ph.D. course, the student must undertake an independent research, collect fresh primary data, present them as factual and conceptual findings, and create new knowledge in the form of model or theory at the end.
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In a Ph.D. course, the student must undertake an independent research, collect fresh primary data, present them as factual and conceptual findings, and create new knowledge in the form of model or theory at the end.
Kozlowski has since been indicted--but even before the most recent.